Some members of the National Bank of Poland's interest-rate setting Monetary Policy Council (RPP) are skeptical about the expected rebound in Poland's economy, while others expect GDP growth to accelerate slowly in the coming quarters, according to the minutes of the RPP's May 8 meeting published on Thursday.
“Some Council members emphasized no signals of a possible significant increase in domestic demand in the coming quarters. Some Council members also indicated that – due to … the likely upholding by the EU of the excessive deficit procedure imposed on Poland – further fiscal tightening ... would continue to contain demand growth,” the minutes read.
“However, other Council members were of the opinion that the expected improvement in economic activity in Germany in the second half of 2013 should translate into a recovery in the Polish export sector. It was also noted that capacity utilization in the economy had grown in 2013 Q1, and that – in line with available forecasts – GDP growth should not decrease further and is expected to accelerate gradually over the coming quarters,” the document also said.
According to the minutes, the RPP rejected a motion do cut interest rates by 50 basis points. It then passed another one to lower rates by 25 points.
“Regarding future decisions, some Council members reckoned that further interest rate
decreases could be justified in the coming months if the probability of inflation running below the NBP target over the medium term rose. In the opinion of a few Council members, the results of the next inflation projection should be considered when assessing whether it could be justified to decrease the interest rates,” statement concluded.
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